“Charasse Amendment”: condition on the allocation of contributed funds upon a share capital increase, and characterization of a post-contribution distribution of the share premium – a welcome confirmation and an open question

Written by Adrien Soumagne and Victor Camatta

Published by Doctrine

By a decision dated October 28, 2025, the French Administrative Supreme Court confirmed that funds contributed upon a share capital increase carried out simultaneously with the acquisition of securities falling within the scope of the “Charasse Amendment” are, under the conditions set forth in the text, fully deductible from the numerator of the financial expenses add-back ratio provided for under this provision, without any condition regarding the allocation of the funds.

This decision, consistent with both the letter and the spirit of the law, thus provides clarification that practitioners have been awaiting for several years. The case also incidentally raised the question (not addressed) of whether, and under what conditions, particularly procedural ones, a contribution of securities followed by the distribution of the share premium can be characterized, up to the amount of the distributed premium, as an “acquisition for consideration” falling within the scope of the Charasse Amendment.

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